Singapore court declines WazirX’s restructuring plan following $230-mn hack

Representative image

Crypto exchange WazirX’s restructuring plan to return funds of users following its $230-million hack is now in a limbo as Singapore High Court declined the plan on June 4, the exchange shared on X.

This comes a month after the exchange’s moratorium period under the Singapore court ended. Prior to the cyberattack on one of multisig wallets in July 2024, WazirX was India’s largest crypto exchange with at least 33 percent of Indian crypto users either holding balances or accounts with the exchange.

WazirX lost nearly 45 percent of its crypto holdings in this hack.

The long-awaited restructuring plan’s approval was critical to allow rebalancing of tokens that would have enabled impacted users to recover up to 85 percent of the value of tokens lost in the initial phase.

In a post on X, WazirX said, “The Honourable Singapore High Court issued an order declining to approve our proposed restructuring plan. While this outcome was not what we anticipated, we respect the Court’s decision and remain fully committed to complying with all legal and regulatory processes.”

“Our primary focus remains to begin distributions as soon as possible. Towards this goal, we are currently evaluating all available legal options in consultation with our legal and advisory teams, and will be appealing against the decision of the Singapore High Court,” it added.

The exchange added that the decision does not impact its NLPA (Net Liquid Platform Assets), which remain safe.

Also read: Life savings lost, dashed hopes, uncertain recovery: How WazirX users are coping after $230 million hack

Meanwhile, as per certain media reports, the exchange had shifted its parent entity from Singapore to Panama and rebranded under a new name, Zensui. The reports suggest that this was to escape ongoing crackdown of crypto exchanges in Singapore offering services outside the country without license.

WazirX operates through two entities, a parent company – Zettai Pte in Singapore and Zanmai Labs in India.

A source privy to the developments told Moneycontrol, that that exchange has not done any such move. “Shifting to Panama was one of the options being explored in our ongoing plans. It's a back up plan. But no such move was made so far,” the source said.

The source added, “WazirX is still awaiting the final order from the court. The current decision was due to a confusion on why Zanmai wasn’t registered under the Financial Intelligence Unit-India (FIU-Ind). But Zanmai is actually an India-registered entity. The exchange is working on its next appeal.”

Also read: If creditors vote in favour of the recovery scheme, we may retrieve 90-145% of the lost funds in 3 years: WazirX’s Nischal Shetty